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Wall Street jitters: Fed Chairman Ben Bernanke told Congress this morning that the economy will keep growing - moderately - and that troubles in the subprime market don't appear to be spreading. Still, he says risks remain - he's calling inflation "uncomfortably high." Well, the market isn't happy ($64 a barrel oil and a weak durable goods report hasn't helped). The Dow is off 125 points after about 90 minutes of trading. Bloomberg
New Century gets closer: This has been an accident waiting to happen for a month or more, but the NYT says that the OC-based subprime lender could file for bankruptcy protection by the end of the week. The company, which stopped making loans this month after disclosing that federal prosecutors and regulators were investigating, has been trying to find a buyer and avoid a bankruptcy filing, but no takers so far. New Century’s most valuable asset appears to be the fancy software it uses to make loans.
City National purchase: Ever focused on rich folks, the L.A.-based bank holding company is buying Lydian Wealth Management, a money manager for the veeeery rich. The firm will open an office in L.A. this summer but remain headquartered in Rockville, Md. It now manages or advises on client assets totaling $7.3 billion, with offices in the Washington, NY, Philadelphia, Atlanta, Seattle and Portland. You need a $40 million nest egg to be a client.
Rocky start for Univision: The feds finally approved the $12.3 billion sale of the Spanish-language media giant to a bunch of equity funds and billionaire Haim Saban, but now it must deal with a ton of debt, an ineffective ad revenue strategy and a Mexican partner, Grupo Televisa, that's probably still ticked off for not being the winning bidder. The FCC approval came after Univision agreed to shell out $24-million for not running enough kids programming. LAT
Borders pulling back: No more Holiday Savings Awards or Personal Shopping Days at the nation's second-largest bookseller. They're being replaced by a less generous membership awards program called Borders Bucks. Under the new plan, customers get $5 in Borders Bucks for every $150 in purchases at Borders superstores or Waldenbooks stores. They only have a month to redeem the coupon. Borders reported disappointing fourth-quarter earnings last week. From the WSJ:
The company announced the new program to customers in a cheery email that lauded the plan as "now simpler than ever" and "a new program to celebrate." But, under the old plan, discounts could be much deeper. Members were given Personal Shopping Days, which enabled those who had spent $50 in a month to apply a 10% discount on all purchases made on a specific day in the following month. Gift cards were the exception. Customers also received a credit equal to 5% of their store purchases made through Nov. 14 in a special Holiday Savings account. That credit could then be used on purchases made from Nov. 15 through Jan. 31. The only caveat was that customers had to have at least $10 in their account -- which meant they had to have spent a minimum of $200 to qualify.
L.A. tops in manufacturing: It sounds strange, what with all the shuttered factories and offshore activity, but Los Angeles County still had 911,000 manufacturing jobs last year, which makes it the area's biggest employment sector - and the biggest in the nation. Actually, it's held the No. 1 position for years (occasionally jostled by Chicago). A report by the L.A. Economic Development Corp. found that Socal manufacturing typically involves small to mid-size firms with some sort of tech bent. Daily News
New operator for KKJZ: And guess who it is? Saul Levine. Boy, that guy gets around. The L.A. radio impressario who just turned the much-loved K-Mozart into an AM station - and put in "Go Country" 105 where K-Mozart had been - will now be running KKJZ, the Cal State Long Beach jazz station. Levine promises to keep focusing on classic jazz (the Miles Davis and John Coltrane stuff) as opposed to the "smooth" jazz heard in elevators and supermarkets. The change of operators came about because Levine's predecessor, Pacific Public Radio, apparently left the place in poor financial shape. The station has lost more than a quarter of its audience over the past few years. Press-Telegram
Speaking of radio: Long-time radio talker Joe Crummey has let the secret out: His popular afternoon show on KFYI in Phoenix is actually done out of his house in Studio City (even though he comments on all kinds of Arizona-centric issues). "I admit that it is obvious that listeners infer that I'm there," Crummey told the NYT. Crummy, of course, had been a long-time conservative voice for KFI before being hired by the Arizona station, which is owned by Clear Channel. His wife has a big job at Disney and his kid had just gotten into school, so they worked out this arrangement
Mark Lacter created the LA Biz Observed blog in 2006. He posted
until the day before his death on Nov. 13, 2013.